How they get 8.29995068%
#HOW?
topaz citrus
oblique tusk
$1+\frac{0.08}{12} = 1.00666.. \ 1.0666..^{12} = 1.08299$
buoyant fogBOT
conquestace
oblique tusk
and thats and that is 8.29%
topaz citrus
I don’t get it
Why they remove the
1.082…
Like where’s the 1.0
Where did it go
And why they divide it by 8
oblique tusk
that's just notation of how we represent the information
when working with percentages (specifically for interest rate)
we don't say 108.2% interest
but instead we say 8.29% interest
when you have a decimal value
say 0.5
that can be represented as a percentage by multiplying the value by 100
so 0.5 * 100 = 50%
or 0.25*100 = 25%
if you follow this rule with the value you got, 1.082 * 100
we get 108.2%
but when talking about interest that doesn't really make sense
(the more rigorous reasoning has to do with the how the math works out within the exponentials)
but rather than saying 108.2% interest, we say 8.2% interest
ignoring the 1.0
Basically it's the mathematical definition of an interest rate:
$$ P(t)=(1+i)^t$$
buoyant fogBOT
conquestace
oblique tusk
where $i$ is the interest rate
buoyant fogBOT
conquestace
